| Abstract: | The controllability principle suggests that employees should not be held accountable for factors outside their control. This study develops novel theory to challenge that thinking. According to the theory, holding employees accountable for uncontrollable factors like peer performance can lead to improved decision-making by increasing how much employees learn from those uncontrollable factors. I expect this effect to occur because goal-focused employees only consider information that seems goal-relevant, and uncontrollable factors only seem goal relevant when employees are held accountable for them. Results from a decision-making experiment support the theory. In particular, paying participants based on uncontrollable factors improves their decision-making despite providing them with weaker economic incentives. This positive effect is more pronounced when the uncontrollable factors are more informative and when individuals are more goal-focused. These findings reveal a previously unexplored benefit of disregarding the controllability principle that can help explain why broad, uncontrollable metrics are so prevalent and successful in practice. |
